In 2020, the institutional big steak team’s entry into the cryptocurrency field completely sounded the horn of the institutional bull. As a member of the organization’s army, Paypal may be added a little later.
As an international trade payment tool sought after by hundreds of millions of users around the world, Paypal is one of the most widely used third-party payment tools in the world, established by Peter Thiel and Max Levchin. The service scope exceeds 200 markets, and the supported currencies exceed 100. In cross-border transactions, nearly 70% of online cross-border buyers choose PayPal to pay for overseas purchases, which is a veritable global payment platform.
In fact, there is another key figure in the development history of Paypal- Elon Musk , who may be the true enlightenment teacher for Paypal to enter the cryptocurrency field.
Musk: Can’t walk, stop for a while
If you don’t have a detailed understanding of Paypal’s development history, it is actually difficult to associate it with Musk, the “crypto-calling single devil”. Paypal did not appear in 1998. Max Levchin and Peter Thiel first established Confinity. Paypal was officially launched in 1999. In 2000, Confinity announced the merger with X.com founded by Musk, and in the following year, X.com was officially renamed Paypal, which is now the real predecessor of Paypal.
At that time, as the founder of X.com, after the merger of X.com and PayPal, Musk squeezed out the original founder of Paypal, Peter Thiel, and became CEO himself. However, due to poor management, he was jointly impeached by employees and the board of directors. Peter Thiel returned to Paypal. It can also be seen that Musk’s innovative ideas have not been recognized by traditional institutions such as Paypal, and whether these innovative ideas involve the field of cryptocurrency, we have no way of verifying, but what we can know is that Musk has been In 2014, he expressed his great interest in Bitcoin.
Although the story of Musk and Paypal is over, the story of Musk and cryptocurrency has officially begun.
On April 1, 2019, Dogecoin’s official Twitter released a survey “Who should be the next CEO of Dogecoin?” In the atmosphere of April Fools’ Day, Musk won with 54% of the votes. When he heard the news, Musk readily accepted the “position” and changed his Twitter profile to “CEO of Dogecoin” (Dogecoin CEO), but then he seemed to feel that something was wrong, so he changed it to “dog Former CEO of Dogecoin”. Since then, Musk seems to have fallen in love with Dogecoin.
Dogecoin developer Nickel once said in an interview that they have been working with Musk since 2019. Musk provided “a lot of suggestions and opinions” and shared his huge network, but the development team rejected the funding he provided. This also means that Musk did not suddenly wake up in 2021. He began to deploy Dogecoin in 2019 and officially moved to the front of the stage in 2021, from the former CEO of Dogecoin to the godfather of Dogecoin.
Of course, the Dogecoin godfather is not Musk’s job. As Tesla’s CEO, Musk’s every move will have a certain impact on the market. So after Musk announced that Tesla would accept bitcoin as payment, bitcoin immediately rose sharply, from 39,200 US dollars to 44,300 US dollars within 40 minutes, and further rose to 48,200 US dollars the next day.
But on the road to embracing Bitcoin, Musk fell behind. At 6 o’clock in the morning on May 13, 2021, a tweet from Musk poured cold water on the crypto market. The tweet stated that Tesla will suspend accepting Bitcoin payments due to energy consumption problems caused by Bitcoin mining and expressed concern about the rapid increase in the frequency of using fossil fuels in Bitcoin mining and transactions. However, Musk emphasized that Tesla will not sell any Bitcoin.
Even so, Musk was still abusive on the Internet, and he was dubbed the title of “Scumboy” by Musk. Compared with Musk’s old club Paypal, he has never stopped after his spontaneous research in the field of cryptocurrency.
Paypal: Climb up step by step
If your memory of PayPal’s involvement in the cryptocurrency field began in October 2020, then you are wrong.
It starts from six years ago. In 2014, PayPal established a cooperative relationship with BitPay, Coinbase, and GoCoin, so that merchants who use PayPal for transactions on eBay can accept Bitcoin payments from customers. It is 2014 again. Remember what we mentioned earlier. In 2014 , Musk revealed that he was very interested in Bitcoin. The relationship between the two is self-evident. This may also further confirm the view that Musk is PayPal’s encryption enlightenment teacher.
In addition, Paypal has not stopped its research in the field of cryptocurrency since 2014, and has been cooperating with regulated cryptocurrency platforms and central banks around the world to explore the potential of digital currencies. And through its internal blockchain research team, it constantly explores the research on the new generation of digital financial service infrastructure and digital commerce. Therefore, in 2019, PayPal Ventures, a venture capital arm of PayPal, invested in the cryptocurrency risk management platform TRM Labs and the blockchain-based identity management and compliance software company Cambridge Blockchain, and also participated in the launch of Facebook’s stable currency Libra project (later Changed its name to Diem) to become a member of the Libra agreement, but due to regulatory and censorship pressure, PayPal later chose to withdraw from the project.
In 2020, cryptocurrency has gradually become a trend overseas. The outbreak of DeFi and the admission of major institutions seem to be beckoning like PayPal. At this time, PayPal itself was also under pressure from declining performance. According to PayPal’s first quarter financial report, PayPal’s operating income in the first quarter of 2020 was US$4.618 billion, an increase of 11.87% year-on-year, while the net profit attributable to ordinary shareholders was US$84 million, a year-on-year decrease of 87.41%. Under PayPal’s financial situation and the prevailing trend of the main theme, PayPal naturally chose to expand its business.
On October 21, 2020, PayPal issued a statement announcing its official entry into cryptocurrency.
The statement mentioned that taking into account the new crown pneumonia and the surge of interest in digital currencies by the central bank and consumers, the acceleration of digital payment and digital transformation is particularly urgent. To this end, a new service will be launched that allows users to directly access PayPal accounts. Buying, selling and holding cryptocurrency will also allow users to use cryptocurrency to settle purchases at 26 million merchants on the platform. This service is provided by the company in cooperation with Paxos Trust Company, a supplier of compliant virtual currency products and services. In addition, through Paxos, PayPal has obtained the first virtual asset limited license from the New York State Department of Financial Services.
It is reported that PayPal has 346 million active accounts worldwide, including more than 26 million merchants. Therefore, the announcement of PayPal’s entry into the cryptocurrency field will not only indirectly provide its more than 300 million users with cryptocurrency buying and selling services, but also enable 26 million merchants to accept Bitcoin, and it will also significantly increase the adoption of cryptocurrencies in the next few years. Degree and scale.
On November 12, 2020, PayPal announced that it is opening its new cryptocurrency service to all eligible U.S. users. All qualified U.S. PayPal account holders can now purchase, hold, and sell cryptocurrencies directly through PayPal. As soon as this news came out, the market responded enthusiastically, so in February 2021, PayPal stated that due to the very strong market demand for this, the weekly user limit was increased from 10,000 US dollars to 20,000 US dollars.
But even so, market demand has greatly exceeded PayPal’s expectations. PayPal CEO Dan Schulman revealed that the demand for cryptocurrencies has reached PayPal’s initial expectations several times, which is exciting. It is precisely based on such huge demand that Paypal has not long ago raised the upper limit of cryptocurrency purchases for eligible users in the United States to 100,000 US dollars per week, and completely abolished the annual limit.
In the time when PayPal entered the field of cryptocurrency, it has successively opened up to allow American and British consumers to use their cryptocurrency to make payments to millions of online merchants around the world, and allows users to use four cryptocurrencies to pay. On April 20th, PayPal’s mobile payment software Venmo began to support cryptocurrency transactions.
Based on the layout in the cryptocurrency field, PayPal’s transaction revenue in the second quarter increased by 17% to US$5.80 billion compared with US$4.95 billion in the same period of the previous year. Compared with the previous quarter, transaction revenue has increased by 3%, which also allows PayPal to clearly taste the sweetness of entering the cryptocurrency field. On May 29, PayPal’s Bitcoin transaction volume hit a new high of more than 300 million U.S. dollars. Transaction volume has jumped from approximately US$80 million per day to more than the peak of US$240 million in January.
The end of the story? No, still going on
Although Musk has stopped in embracing cryptocurrency, the “calling for orders” has not stopped.
Not long ago, Musk said in an interview that SpaceX holds Bitcoin, and he personally holds Ethereum, Dogecoin, and Bitcoin. As the proportion of renewable energy used in Bitcoin mining increases, Tesla will May resume accepting Bitcoin as its payment method. Although this is limited to Musk’s personal remarks, such news is still very beneficial to the market public. It is reported that Musk mentioned BabyDoge in a tweet in early July. At that time, the popularity of BabyDoge spread rapidly, and the price instantly more than doubled. It can be seen that the story between Musk and cryptocurrency is still unfinished.
In the pursuit of cryptocurrency, perhaps PayPal may have been inspired by Musk at the beginning, but in the subsequent development, it has gradually stepped out of its own rhythm.
For a long time, PayPal’s encryption road has always followed the pace of supervision and moved closer to compliance. In May of this year, PayPal has had exploratory discussions with developers on stablecoins and plans to launch its own stablecoins. A PayPal representative spokesperson said that PayPal will continue to explore the potential of digital currency, digital financial service infrastructure, and how PayPal can serve as a trusted partner in this field to help enhance digital commerce. PayPal CFO John Rainey once stated in an interview that when cryptocurrencies become more stable in a few years, they will not refuse to invest in the asset.
Obviously, PayPal’s exploration of cryptocurrency has never stopped. Under the influence of supporting cryptocurrency payment services, PayPal currently has more than 400 million active user accounts, with a total payment volume of US$311 billion in the second quarter of 2021. The company also added 14.5 million new active accounts, bringing its user base to 392 million. On July 29, PayPal stated that it will launch a super application wallet with cryptocurrency functions and plans to fully promote the wallet in the United States in the next few months. At the same time, PayPal CEO Dan Schulman said that PayPal may launch encryption services in the UK in early August.
Gu Yanxi, the founder of Liyan Consulting, said that there will be no obvious distinction between banking and securities industry from now on, so now digital asset exchanges will definitely provide existing banking services including storage and lending. The further result is , Modern digital asset exchanges, if the focus of their operations is still trading, they will definitely miss this trend in the future.
PayPal’s encryption road continues, and it has begun to pay attention to the field of DeFi and smart contracts. PayPal’s future is accelerating to serve as a bridge and hub connecting the encryption industry and the traditional financial industry, and the encryption industry has also begun to accelerate due to the addition of PayPal. Compliance is one step closer.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/paypal-musk-and-cryptocurrency-two-or-three-things/
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